The second half of 2019 offers an incredible opportunity for success. Here’s why:
Supply and Demand
Supply in most of the DMV remains low, with multiple offers being more of the norm. In a recent NAR survey, 46% of homeowners responded that they are optimistic about selling. This is up from 37% in the first quarter. The reason being, most believe home appreciation has slowed. In the same survey, 65% are optimistic about buying with 38% believing that now is an ideal time. This survey suggests there will be more inventory entering the market with demand remaining strong.
Since December 2015, the Federal Reserve has raised short term interest rates nine times, which should have resulted in the 30 year rate rising. This has actually resulted in interest rates decreasing. The rate quotes on October 19, 2018, for the 30 year conforming and the 30 year high balance, was 5%, with the FHA and VA at 4.75%. The Mortgage Bankers Association, the National Association of Realtors and Freddie Mac all predicted rates would be between 5.1 % to 5.4% by the end of 2019. Today, the interest rate on a 30 year conforming and 30 year high balance is 3.875% and the 30 year FHA and VA is 3.5%. Considering a $500,000 mortgage paid over 30 years, the difference between a 4% interest rate and 5% is $106,932. And, lower interest rates results in buyer(s) qualifying for more.
Because of the dip in interest rates, the second half of 2019 will provide a unique opportunity in residential real estate. Whether you are a first time buyer, move up buyer, plan on downsizing, or a real estate investor, you can make your move now and lock in a 30 year interest rate at 4% or lower, creating huge future savings.
With the national unemployment rate at 3.7% and local unemployment rates ranging from 2.1% to 2.9%, our area is considered to be in the full employment status. Until recently, the last time the unemployment rate was lower than 3.7% was 1969. The Organization for Economic Co-operation and Development (OECD) gives an estimate of the “full-employment unemployment rate” of 4% to 6.4%.
Housing Affordability Index
The Housing Affordability Index is currently at 152.3%, meaning the median household has 152.3% of the income needed to purchase a median priced home. Put simply, the current median family income is strong enough to purchase one and a half homes.
If you’re considering a move, please get in touch with me. I’m ready to help you achieve your home ownership goals. Call/Text 703-963-0142 or Email firstname.lastname@example.org